Residents of some states are much more financially literate, in large part because of better education and savings. Financial literacy refers to someone's ability to manage their money, including savings, budgeting, investing and borrowing.
Minnesota, Colorado, Nebraska, Virginia and Wisconsin were the top five states for financial literacy, according to a report from WalletHub, which analyzed financial-education programs and consumer habits among 17 metrics, including high school personal finance courses and share of adults with rainy-day funds.
On the other hand, Arkansas, Oklahoma, South Dakota and Wyoming were the worst states for financial literacy.
The findings come as Americans ran up around $1.35 trillion in credit card debt in 2024, which WalletHub said is "unsurprising" because less than half of adults have a budget.
"Too many Americans lack comprehensive financial literacy, which causes them to have lower credit scores, prevents them from getting credit with good interest rates and lowers the amount of wealth they build throughout their life, among other negative consequences," said Chip Lupo, WalletHub analyst, in the report.
Minnesota ranked first for financial literacy for reasons including high schoolers having to take one personal-finance course, the lowest national percentage of adults spending more than they make at 15% and the highest median credit score in the nation at 751, WalletHub said.
"Because financial literacy is so essential, states should prioritize teaching it from a young age. It’s not surprising that the most financially literate states all require personal-finance education before students graduate from high school," Lupo said.
Financial literacy was also linked to income: The higher someone's yearly income, the higher their financial literacy.
What can be done to improve financial literacy?
Parents and the government both have a role to play in improving financial literacy in the U.S.
K-12 schools should include financial literacy from an early age and parents should talk about spending money with their children frequently, said Marybeth Gasman, a professor of education at Rutgers University, in remarks provided to WalletHub.
"We should want everyone to be financially stable and secure, and improving financial literacy puts us on the right path," Gasman said.